AU$3.72: That's What Analysts Think Hipages Group Holdings Limited (ASX:HPG) Is Worth After Its Latest Results

Shareholders might have noticed that Hipages Group Holdings Limited (ASX:HPG) filed its half-yearly result this time last week. The early response was not positive, with shares down 9.4% to AU$2.42 in the past week. Revenues of AU$30m arrived in line with expectations, although statutory losses per share were AU$0.0064, an impressive 36% smaller than what broker models predicted. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Hipages Group Holdings

After the latest results, the four analysts covering Hipages Group Holdings are now predicting revenues of AU$63.8m in 2022. If met, this would reflect a meaningful 8.1% improvement in sales compared to the last 12 months. Losses are predicted to fall substantially, shrinking 72% to AU$0.0025. Before this latest report, the consensus had been expecting revenues of AU$64.3m and AU$0.00067 per share in losses. While this year's revenue estimates held steady, there was also a very substantial increase in loss per share expectations, suggesting the consensus has a bit of a mixed view on the stock.

With the increase in forecast losses for next year, it's perhaps no surprise to see that the average price target dipped 13% to AU$3.72, with the analysts signalling that growing losses would be a definite concern. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. There are some variant perceptions on Hipages Group Holdings, with the most bullish analyst valuing it at AU$4.46 and the most bearish at AU$3.30 per share. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We can infer from the latest estimates that forecasts expect a continuation of Hipages Group Holdings'historical trends, as the 17% annualised revenue growth to the end of 2022 is roughly in line with the 15% annual revenue growth over the past year. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 9.2% per year. So although Hipages Group Holdings is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts increased their loss per share estimates for next year. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Hipages Group Holdings analysts - going out to 2024, and you can see them free on our platform here.

Before you take the next step you should know about the 1 warning sign for Hipages Group Holdings that we have uncovered.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.